Ministry of Commerce holds session on EU’s carbon border adjustment mechanism

KARACHI: The Ministry of Commerce (MoC) of Pakistan, in collaboration with the Trade Development Authority of Pakistan (TDAP) and the European Commission, hosted an informative session on the carbon border adjustment mechanism (CBAM), which affects several key sectors including cement, iron and steel, aluminium, fertilisers, electricity and hydrogen.

The session featured a comprehensive presentation by Delphine Sallard, director-general of Taxation and Custom Union (TAXUD) at the European Commission. She explained that the CBAM is a tool introduced by the EU to combat carbon leakage by imposing a carbon price on imports from non-EU countries. This mechanism ensures that imported goods face the same carbon costs as those produced within the EU, promoting global reductions in greenhouse gas emissions.

Sallard also discussed the potential impacts of CBAM on Pakistan’s exports to the EU, adding that Pakistani exporters will need to measure, report and reduce carbon emissions in their production processes. Failure to comply could result in products becoming less competitive due to the added costs associated with carbon pricing.

Nasir Hamid, additional secretary of the Ministry of Commerce, urged Pakistani industries to adapt to these new regulations, stating that compliance will be crucial for maintaining access to European markets. He highlighted that TDAP, alongside Omar Hameed, EM Brussels, is actively facilitating the Pakistani business community to ensure they meet these requirements.

The awareness session was attended by representatives from both the private and government sectors, reflecting a collaborative effort to navigate the evolving landscape of international trade regulations.